Morningstar hands Invesco low rating

Morningstarhas released its business and management strength rating forInvesco Australiaand has been less than complimentary awarding the manager a two out of five in its new research process.

The rating places the manager above the bottom 10 per cent of managers and within the next 22.5 per cent of managers.

According to Morningstar’s report Invesco only had weak or average ratings in the nine key areas which make up the BMS rating and the outlook for eight of those areas was neutral.

In the area of stability and profitability Invesco was judged to be weak due to operating losses in the 2001 financial year which was attributed to the integration of County as well as a decline in funds under management.

Morningstar has also tipped this to continue stating that Invesco also lost $150 million in the first quarter of 2002 which would have a negative impact on the group.

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The research group says fund outflows have been driven by poor investment returns and a lack of understanding of Invesco’s strategy in the local market after the purchase of County.

However Invesco did receive some minor kudos for its efforts in turning that around with the launch of a marketing campaign and a round of cost reductions.

Morningstar also claims in the rating report that while Invesco has the support of its parent group, Amvescap, that Invesco would need to turn around its current performance to ensure that support over the long term.

Invesco’s senior management were highlighted as being experienced with most at the company for more than five years but despite this Morningstar still rated the leadership of the group as average but did report that efforts were being made to build the investment team.